Consulting Agreement
THIS AGREEMENT (hereinafter referred to as "Agreement") is entered into
on this 9th day of March 1999 by and between Cyntech Technologies, Inc., a
corporation promulgated under the laws of the State of UTAH, and all
Subsidiaries, Successors, Affiliates, Designees, Legatees, and Assign(s), whose
primary place of business is 0000 Xxxxxxxxxx Xxxxx XX, Xxxxxxx, XX 00000-0000
(hereinafter referred to as "COMPANY") and The Challenge, LTD., Inc. and/or
Assign(s), (hereinafter referred to as ""CHALLENGE"").
SERVICES TO BE PROVIDED BY "CHALLENGE"
COMPANY retains "CHALLENGE" to provide marketing, distribution, and
strategic development agency and representation services within the following
regions: as follows: Latin American nations.
COOPERATION OF COMPANY
COMPANY understands that "CHALLENGE" cannot work effectively on
COMPANY's behalf without COMPANY cooperation and lack of cooperation may result
in higher fees, time delays, and possibly termination of this agreement. COMPANY
agrees to (a) Provide "CHALLENGE" with an address and telephone number(s) at
which all authorized Agents of COMPANY can be reached, and immediately inform
"CHALLENGE" of all changes; (B) Notify "CHALLENGE" immediately if COMPANY
receives or comes into possession of material information or knowledge of any
material omissions or material errors in connection with the operations of
COMPANY or the Securities Offering or bridge financing aforementioned in section
two (2); (c) Promptly provide all documentation and information as requested by
"CHALLENGE"; (d) Make all related parties available for telephone and office
consultations and/or inquires as well as other related activities; (e) Promptly
advise "CHALLENGE" of all events or changes of circumstances which may effect
COMPANY's material standing; (f) Do all things reasonably necessary for the
preparation, expedition, and execution of this matter; (g) Be truthful with
"CHALLENGE"; (h) Pay "CHALLENGE" on time.
RATE OF CONSULTING FEES
COMPANY agrees to pay a flat, previously agreed rate for business
development services and activities (as further defined in Section 2
hereinabove) spent on this matter by "CHALLENGE". "CHALLENGE"'s rate is
$350,000.00 for such services performed as referenced in Section 2 above. It is
understood that time is of the essence in this undertaking. Usual office hours
are 10:00AM PST to 6:00PM PST on weekdays except for holidays.
Payment of fees shall be as follows:
1. The sum of $150,000USD to be paid to and received by "CHALLENGE" no
later than the 15th of March, 1999;
2. The sum of $100,000USD to be paid to and received by "CHALLENGE" no
later than the 15th of April, 1999;
3. The sum of $100,000USD to be paid to and received by "CHALLENGE" no
later than the 15th of May, 1999;
If COMPANY shall become materially delinquent in excess of seven (7)
calendar days in any payment hereinabove, all services shall cease and the full
retainer shall become due and payable to "CHALLENGE" immediately. Further, upon
material delinquency in payment for services rendered By "CHALLENGE" for the
benefit of COMPANY, "CHALLENGE" may pursue all injunctive relief necessary and
COMPANY hereby expressly waives the posting of any or all bond inherent to such
relief, for the sole purpose of collecting such fees. This rate set forth above
covers general office work, conferences, research, telephone calls and for any
other tasks associated with the above referenced matter. COMPANY agrees to
arrange and pay for on a timely and expeditious manner, at "CHALLENGE"'s prudent
request, all necessary travel and lodging arrangements, round trip basis (ie.,
from portal to portal) in connection with the above referenced matter. COMPANY
hereby acknowledges that "CHALLENGE", as a courtesy and in good faith and trust,
shall initiate said services referenced hereinabove prior to the receipt of any
funds, and that "CHALLENGE" shall bear certain economic and monetary risk on
behalf of COMPANY.
COSTS AND EXPENSES
In addition to paying "CHALLENGE"'s fee as defined in Section 4 of this
Agreement, COMPANY shall reimburse "CHALLENGE" for any and all extraordinary
costs and expenses "CHALLENGE" may incur that is agreed by COMPANY to be outside
the context of general office work covered by Section 4 above. These
extraordinary other costs and expenses are to be confirmed and when possible, in
writing, with all necessary proof provided, prior to COMPANY disbursing the
funds in a prudent and timely manner. COMPANY shall be obligated to pay only
those expenses that are incurred with COMPANY's consent and/ or implied consent,
All promotional activities, entertainment expenses, legal fees, deposits,
engagement and/or commitment fees, and all other costs and expenses to be
disbursed on behalf of COMPANY for COMPANY's benefit shall be disbursed directly
by COMPANY in a prudent and timely manner or if "CHALLENGE" is to advance such
costs, at the sole discretion of "CHALLENGE", COMPANY shall reimburse
"CHALLENGE" for such costs upon request by "CHALLENGE". "CHALLENGE" shall have
no obligation to advance any sums for costs. Further, COMPANY agrees to retain
and/or engage any or all additional legal and accountancy counsel referred by
"CHALLENGE" for matters being undertaken by "CHALLENGE" for the benefit of
COMPANY. COMPANY recognizes that if s/he fails to provide funds for costs when
requested by "CHALLENGE", actions necessary or helpful to COMPANY's matter may
not be taken.
STATEMENTS AND LIABILITY FOR CHARGES
"CHALLENGE" shall submit statements if any outstanding balances exist,
to COMPANY indicating the current status of the account and such balances due
and payable to "CHALLENGE" for services rendered. COMPANY should review these
statements carefully. If COMPANY does not notify "CHALLENGE" within forty-eight
(48) hours of COMPANY's receipt of the statements of any objections COMPANY may
have to the statement, "CHALLENGE" will assume that COMPANY approves of the
services rendered and charges. In reliance on that implied approval, "CHALLENGE"
will continue to render services pursuant to the terms of this Agreement
provided that a method of resolving all outstanding balances to be paid to
"CHALLENGE" is agreed to solely by "CHALLENGE" prior to the re-initiation of
said services.
All additional fees in excess of retainer are to be paid on the first
and the fifteenth of every month in respective amounts. COMPANY is liable to
"CHALLENGE" for all actual services rendered and costs associated therewith at
the time services are rendered or costs are incurred. COMPANY shall pay
"CHALLENGE"'s statements as indicated on the statement received. COMPANY shall
pay statement in full each billing statement.
DELINQUENCY OF STATEMENTS
The statements are due and payable immediately upon receipt unless
other specific written arrangements have been made. If any charges are not paid
as required by billing statement, they will be considered delinquent. In such
event, COMPANY shall pay a late payment charge equal to one percent (1%) of the
fees and costs in arrears for each month in which any of the fees remain unpaid.
This late payment charge is intended as liquidated damages for failure to pay
fees when due, and represents from time fees are withheld plus reasonable
administrative costs of collecting and accounting for unpaid fees. COMPANY
understands and acknowledges that separate calculation of actual damages for
each instance of late payment would be extremely difficult and impractical, and
further acknowledges that the foregoing provision for liquidated damages is
reasonable under the circumstances existing as of the date of this Agreement.
In the event that "CHALLENGE" is required to enforce the terms of this
Agreement or if same must be referred to a collection agency for collection, the
prevailing party shall also receive reimbursement for attorney's fees and court
costs expended.
DISCHARGE AND WITHDRAWAL
COMPANY may discharge "CHALLENGE" at any time for the following: felony
conviction, bankruptcy, material unremedied breach of the terms and conditions
of this Agreement, breach of fiduciary duty, or any proven unlawful or unethical
activities, provided that final payment for any outstanding balances are
received in full with written notice of termination.
"CHALLENGE" may not withdraw without COMPANY's consent unless COMPANY
materially breaches the terms of this Agreement, COMPANY's failure to pay
"CHALLENGE" fees, COMPANY's refusal to cooperate with "CHALLENGE" or to follow
"CHALLENGE"s advice or requests on any material matter, or any other COMPANY
action, in action, or caused circumstance by COMPANY that would render
"CHALLENGE"'s services unlawful or unethical, felony conviction or indictment,
bankruptcy, any proven unlawful or unethical activities by COMPANY. Furthermore,
upon "CHALLENGE"'s withdrawal for Good Cause, COMPANY shall forfeit any or all
remaining retainer balance, or if any future retainer payments have not come due
at the time of "CHALLENGE"'s withdrawal for Good Cause, such retainer payments
shall immediately become due, payable, and immediately forfeited by COMPANY to
"CHALLENGE".
INDEMNIFICATION
The COMPANY agrees to indemnify and hold harmless "CHALLENGE", and his
affiliates, agents, subsidiaries, successors, predecessors, legatees, designees,
representatives, employees, and assigns from and against any and all Losses of
COMPANY, directly or indirectly, as a result of, or based upon or arising from
(i) any inaccuracy in or breach of non-performance of any of the
representations, warranties, covenants, or agreements made by the COMPANY in or
pursuant to this Agreement, or (ii) any other matter as to which the COMPANY in
other provisions of this Agreement has agreed to indemnify "CHALLENGE".
The COMPANY agrees to indemnify, defend, and hold harmless the
"CHALLENGE" , including but not limited to, the following: (i) any Tax payable
by or on behalf of the COMPANY or any of its Affiliates, (ii) any deficiencies
in any Tax payable by or on behalf of the COMPANY or any of its Affiliates
arising from any audit by any taxing agency or authority, (iii) Taxes of any
member of a consolidated or combined tax group of which the COMPANY or any of
its Affiliates is, or was at any time, a member, for which "CHALLENGE" is
jointly or severally liable as a result of inclusion in such group, (iv) any
claim or demand for reimbursement or indemnification resulting from any transfer
by the COMPANY of any Tax benefits or credits to any other Person, and (v) any
Tax liabilities arising out of the transfer of the Shares.
The COMPANY shall have the responsibility for, and the right to
control, at the COMPANY's expense, the audit (and disposition thereof) of any
Tax Return and to participate in and approve the disposition of the audit of any
tax return if such audit or disposition thereof could give rise to a claim for
indemnification hereunder. "CHALLENGE" shall have the right directly or through
its designated representatives, to review in advance and comment upon a
submissions made in the course of audits or appeals thereof to any Governmental
Entity and to approve the disposition of any audit adjustment with respect to
such periods if such disposition will or might reasonably be expected to result
in an increase in Taxes of the COMPANY as to which "CHALLENGE" is jointly or
severally liable as a result of inclusion in such group. Any party seeking
indemnification with respect to any Loss shall give notice to the party required
to provide indemnity hereunder ( the "Indemnifying Party").
If any claim, demand, or liability is asserted against any third party
against an Indemnified Party, the Indemnifying Party shall upon written request
of the Indemnified Party, defend any actions or proceedings brought against the
Indemnified Party in respect of matters embraced by the indemnity, but the
Indemnified Party shall have the right to conduct and control the defense,
compromise or settlement of any Indemnifiable Claim if the Indemnified Party
chooses to do so, on behalf of and for the account and risk of the Indemnifying
Party who shall be bound by the result so obtained to the extent provided
herein. If, after a request to defend any action or proceeding, the Indemnifying
Party neglects to defend the Indemnified Party, a recovery against the latter
suffered by it in good faith, is conclusive in its favor against the
Indemnifying Party, provided however that, if the Indemnifying Party has not
received reasonable notice of the action or proceeding against the Indemnified
Party, or is not allowed to control its defense, judgment against the
Indemnified Party is only presumptive evidence against the Indemnifying Party.
Each Party hereto, to the extent that it is or becomes an Indemnifying Party,
hereby stipulates that a judgment against an Indemnified Party shall be
conclusive against the Indemnifying Party. The parties shall cooperate in the
defense of all third party claims, which may give rise to Indemnifiable Claims
hereunder. In connection with the defense of any claim, each party shall make
available to the party controlling such defense, any books, records or other
documents within its control that are reasonably requested in the course of such
defense and necessary or appropriate for such defense.
This Section 9 shall survive any termination of this Agreement. This
indemnification shall further survive the termination and term of this Agreement
and shall remain in effect for a period of the late of (i) two years after the
termination or term of this Agreement or (ii) such time as "CHALLENGE" believes,
in the exercise of reasonable discretion, that the risk of Losses to the
"CHALLENGE" hereunder is not material to "CHALLENGE" (the "Indemnification
Period"). Any matter as to which a claim has been asserted by notice to the
other party that is pending or unresolved by the end of any applicable
limitation period shall continue to be covered by this Section 10
notwithstanding any applicable statute of limitations (which the parties hereby
waive) until such matter is finally terminated or otherwise resolved by the
parties under this Agreement or by a court of competent jurisdiction and any
amounts payable hereunder are finally determined and paid. The COMPANY agrees to
notify "CHALLENGE" of any liabilities, claims or misrepresentations, breaches or
other matters covered by this Section 9 upon discovery or receipt of notice
thereof ( other than from "CHALLENGE" ). This Section 9 shall not be deemed to
preclude or otherwise limit in any way the exercise of any other rights or
pursuit of other remedies for the breach of this Agreement or with respect to
any misrepresentation.
GOVERNING LAW
This Agreement shall be interpreted and governed by applicable
commercial and civil law of the State of California. In the event that any Party
hereto be domiciled in a jurisdiction other than the State of California, that
certain Party hereby waives all rights and privileges under such jurisdiction
and further stipulates solely to the State of California for jurisdiction of
prevailing law.
CHOICE OF LAW; BINDING ARBITRATION AS EXCLUSIVE REMEDY
Should a dispute or controversy arise relating in any way to this
Agreement, or to the rights and responsibilities set forth hereunder, the
"CHALLENGE" and the COMPANY shall make a reasonable attempt to settle the matter
amicably between themselves. Notwithstanding remedy(s) referenced in Section 4
hereinabove, failing such settlement, any action to enforce or interpret this
Agreement, or to resolve disputes between the "CHALLENGE" and the COMPANY shall
be settled by binding arbitration in the State of California, in accordance with
the rules of the American Arbitration Association. Any such Arbitration shall
take place in Los Angeles, California, and shall be conducted by a single
arbitrator.
The decision of the Arbitrator shall be final and binding. Either party
may commence arbitration by sending a written demand for arbitration to the
other parties. Such demand shall set forth the nature of the matter to be
resolved by arbitration. The substantive law of the State of California shall be
applied by the Arbitrator to the resolution of the dispute. The prevailing party
shall be entitled to reimbursement of attorney fees, costs, and expenses
incurred in connection with the arbitration.
All decisions of the Arbitrator shall be final, binding, and conclusive
on all parties. The Arbitrator shall award to the prevailing party, or parties,
attorney fees, costs, and expenses incurred in connection with the arbitration,
unless the arbitrator, in its reasonable discretion, determines such an award to
be unjust. Any award rendered by the Arbitrator, including an award of costs and
attorney's fees, may be enforced in any court having jurisdiction over the
person against whom the award is rendered. Judgment may be entered upon any such
decision in accordance with applicable law in any court having jurisdiction
thereof. The Arbitrator (if permitted under applicable law), or such court, may
issue a writ of execution to enforce the Arbitrator's decision.
REGARDING SUCH ARBITRATION, THE PARTIES UNDERSTAND THE FOLLOWING:
- the parties are waiving their right to a jury trial and their right
to seek remedies available in court proceedings;
- pre-arbitration discovery is generally more limited than and
different from court proceedings;
- the arbitrator's award is not required to include factual findings or
legal reasoning; and,
- any party's right to appeal or to seek modification of the award is
strictly limited and the award is final and binding on the parties.
REMEDIES CUMULATIVE
All rights and remedies of either party hereunder are cumulative and
are in addition to and shall not exclude any other right or remedy allowed by
law. All rights and remedies may be exercised concurrently.
NON-DISCLOSURE AND NON-CIRCUMVENTION
The Parties hereto agree to abide by and adhere to the principles of
non-disclosure, non-circumvention, and ethical business practices, and each
further agrees not to disclose the nature or extent of the transactions or
business opportunities involved, so that the confidentiality and proprietary
nature of the information obtained by all parties shall be maintained for a
period of Five (5) years unless otherwise waived in writing by COMPANY. Upon
material breach of this Section 17 by COMPANY, "CHALLENGE" may pursue all
injunctive relief necessary and COMPANY hereby waives the posting of any or all
bond inherent to such relief, for the sole purpose of preventing any further
breach.
MUTUAL FIDELITY
Each of the Parties hereto shall deal with the other Parties hereto in
all matters relating to the above services with the fullest degree of fiduciary
responsibility to each other to this Agreement. Each party shall give all
material information, documents, and contracts (or copies thereof) as
necessitates to the above-mentioned matter.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which is considered to be an original, but all of which together are one and the
same document. Any changes, handwritten or otherwise, must be signed by all
signatories, or successor(s) or assign(s) thereto.
CAPTIONS
The captions appearing in this agreement have been inserted for
reference only and as a matter of convenience no way define, limit, or enlarge
the scope or meaning of this Agreement or any provision thereof.
NOTICES
All notices, demands, requests and other communications under this
Agreement shall be in writing, shall be considered to have been given and
received if delivered by certified mail return receipt requested, postage
prepaid, or by overnight courier to the following addresses:
If to "CHALLENGE": The Challenge, LTD.,
C/O Xxxxx Xxxxxxx, Atty-in-fact
00000 Xxxxxxxx Xxxxxx Xxxx X
Xxxxxxxxx Xxxxx, XX 00000
If to COMPANY: Cyntech Technologies, Inc. and Successors
0000 Xxxxxxxxxx Xxxxx XX
Xxxxxxx, XX 00000-0000
Attention: R. Xxxxx Xxxxx, CEO
INUREMENT
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legatees, designees, successors, and
permitted assigns.
WAIVER
No waiver of any terms or conditions of this Agreement shall be binding
or effective for any purpose unless expressed in writing and executed by the
party consenting the waiver.
ENTIRE AGREEMENT
The provisions described herein are the entire Agreement between the
parties and supersede all previous communications, representations, and
agreements whether verbal or written between the parties regarding the subject
matter hereof.
SUCCESSORS AND ASSIGNS
This agreement shall be binding upon the successor and assigns of each
of the parties.
GENDER, TENSE, ETC,
Whenever the masculine, feminine or neuter genders are use herein, as
required by the specific context or particular circumstance, they shall include
each of the other genders as appropriate. Whenever the singular or plural
numbers are used, they shall be deemed to be the other as required. Wherever the
past or present tense is utilized in this Agreement and the context or
circumstances require another interpretation, the present shall include the past
and the future, the future shall include the present, and the past shall include
the present.
SPECIFIC PERFORMANCE; SEVERABILITY
COMPANY hereby acknowledges and agrees that irreparable damage would
occur in the event any of the provisions of this Agreement were not performed
COMPANY in accordance with their specific terms or were otherwise breached and
that such damage would not be compensable in money damages and that it would be
extremely difficult or impracticable to measure the resultant damages. It is
expressly agreed by COMPANY that "CHALLENGE" shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof, in addition to any other
remedy to which "CHALLENGE" may be entitled at law or equity, and COMPANY that
is pursued for breach of this Agreement expressly waives any defense that a
remedy in damages would be adequate and expressly waives any requirement in an
action for specific performance for the posting of a bond by "CHALLENGE", the
party bringing such action. Should any part of this Agreement be declared or
held invalid for any reason, such invalidity shall not affect the validity of
the remainder of the agreement, which shall continue in full force and effect.
Further, the Parties hereby agree to immediately adopt, in writing, a substitute
provision designed to implement the Parties original intent herein, while fully
complying with the rule, statute, or ruling under which the previous provision
was stricken or unenforceable.
TELEFAX ACCEPTANCE
In the interest of saving time, this Agreement, any extensions or
modifications or supporting documentation shall be deemed to be an original if
executed and accepted or compliance therewith by telefax. AN EXECUTED TELEFAX
COPY OF THIS AGREEMENT IS A LEGALLY BINDING AGREEMENT. Said copy of originating
telefax is to be mailed or via courier to the receiving party within seventy two
(72) hours from the time of transmission.
IN WITNESS WHEREOF, the Parties hereto, through their authorized
signatories, have executed this Agreement in multiple counterparts and have set
their hands to same, intending to be legally bound thereby, as of the day and
year above written.
"CHALLENGE": The Challenge, LTD., Inc. COMPANY: Cyntech Technologies, Inc.
and Successors and/or Assigns Successors and/or Assigns
______________/s/_________________ _____________/s/______________
Authorized Agent: Xxxxx Xxxxxxx, Attorney-in-fact Authorized Agent: R. Xxxxx Xxxxx, CEO
